Bottle Neck

It wasn’t so long ago that the public hailed bottled water as a miraculous, healthy beverage option – a panacea for a fattening America addicted to sugar-laden sodas. The Center for Science in the Public interest named bottled water as a healthy alternative for school vending machines in 2003, and McDonalds – in an effort to brighten its image – even added bottled water to its “Go Active! Adult Happy Meal” in 2004.

But those halcyon days are over, and the turf war is on.

Under assault from environmental crusaders, politicians, federal regulators and price pressures, what was once a healthy alternative has become reviled enough to have a set of alternatives all its own. Consumers have taken to buying refillable plastic or metal bottles, and water filters have seen an uptick in sales that coincides with dampened growth in bottled water revenue. By at least one measurement, the category’s sales have shrunk, and several of the category’s most prominent brands have watched their revenues flatten or fall as groups flog the category to endear themselves with customers or constituents.

In June, for example, the U.S. Council of Mayors voted to end the practice of using municipal funds to buy bottled water, saying it would save taxpayer money and reduce plastic waste. In October, the Environmental Working Group, an organization that supports organic farming and aims to change government policy, made a ruckus about two out of ten tested bottled waters not adhering to California’s tap water standards. Other beverage-related products are bashing bottled water to score points with customers. Zenergize has been in talks to co-promote its drink tablets with Sigg’s metal bottles, and nuun, another drink tablet brand, recently circulated a press release saying it was “committed to breaking the bottled water habit.”

But all that noise could be, a la Bill Shakespeare, sound and fury signifying nothing – at least, according to the International Bottled Water Association. IBWA spokesman Tom Lauria said many of the statements and actions targeting bottled water have been less substantive than they appear. The mayors’ bottled water ban, for example, allows broad exceptions for municipal departments that would face logistical difficulties mandating tap water-only policies. New York City’s sanitation department can still distribute up to two liters of bottled water to each worker on hot days. Lauria even noted that some police officers stationed outside the mayors’ meeting sipped bottled water while they kept guard over the Miami convention center. He classified recent attempts to ban bottled water on college campuses as mere bluster. The bans spawn from talks between corporate responsibility groups and professors, he said, not agitated students.

“It’s not a grass-roots protest,” Lauria said. “It’s very top down.”

In his opinion, the category’s real woes stem from the faltering economy and an increase in beverage options. Former bottled water fans, he said, may be switching to enhanced waters, teas and bargain “drinking waters” that don’t fall under the IBWA’s jurisdiction because they’re sourced, unprocessed, from public water systems. That trend toward drinking water, Lauria said, coincides with a general belt tightening. It also coincides with price battles at the bottom of the category.

Amazon.com, for example, currently offers a 24-count case of .5L Nestle water for just under $7. That’s less than 30 cents per bottle. Undercutting the competition doesn’t seem to be helping the bottled water giant – Nestle reported a 3.9 percent decline in its year-end statement – but bargain prices have tugged mainline brands downward. Profit margins dropped so low on Aquafina that the Pepsi Bottling Group said in July that it refused to cut prices any further. As the year wore on, the distributor watched consumers switch away from Aquafina as the brand’s yearly sales dropped by 16.6 percent in supermarkets, drugstores, and mass merchandise outlets (excluding Wal-Mart) during the 52 weeks ending on Dec. 28, according to Information Resources Inc. PepsiCo even left Aquafina out of its recent round of packaging revamps.

“There’s been so much change in the past year, and it’s grown as a category to the point where, really, we are starting to make very little money,” said David Berwick, Chief Marketing Officer of PepsiCo North America Beverages.

But even if the IBWA believes that the real problem for their industry is the economy, the organization has aggressively confronted affronts to its patron product. Over the past year, the association issued press releases denouncing the study that claimed bottled water was less clean than tap water, a proposed bottled water tax in Hawaii and the bottled water-bashing book Bottlemania.

Premium bottled water brands have confronted head winds in a similarly steadfast manner. Fiji and Evian launched separate environmental initiatives that promise to minimize their products’ impact on the planet and increase patronage of environmental causes. Fiji pledged to invest in the Fijian rainforest, and Evian invested money toward helping locals manage their water resources in Argentina, Nepal and Thailand. Both brands have also tried to push the message that, no matter what environmental crusaders say, bottled water still has less of an environmental impact than any other beverage.

“It is important that consumers do their research to find out what individual brands are doing to protect the environment, and then make sure to do their part by recycling each and every bottle,” said Philippe Daradez, Evian’s vice president of regulatory and corporate affairs.

But, while those brands have kept their chins up, they may be withering from the neck down. Evian watched its sales in PET drop by 15.49 percent in 2008, according to IRI, and Fiji laid off 40 percent of its staff this summer, with little in the way of explanation. Fiji executives said that, despite the deep cut, the company is still in good shape. It may be: IRI reported that Fiji’s sales grew by 6.67 percent in 2008, not bad considering the current environment, though that pales compared to the 22 percent growth Polar Beverages reported for Fiji in the New England area in 2007. Despite sputtering growth, the brand maintains that good days will return.

“Bottled water has much less of an impact on the environment than other packaged beverages,” said Fiji brand manager Daniel Meyer. “And water is also much healthier for people than many of these other beverages. Once the bottled water industry can educate consumers about this, we believe bottled water sales will resume their growth.”

But Fiji and Evian – despite their green efforts – are still imports, another potential environmental pitfall. Cargo ships undeniably increase a product’s carbon footprint, and Fred Water founder and CEO Adam Gayner said he thinks drinking water sourced from distant hemispheres is going out of style.

Bottled water consumers, he said, can only reduce their environmental impact in a handful of ways. They can purchase brands that use recycled plastic bottles with reduced material content – which many bottled water companies, including Fiji and Evian, are working on – or they can reduce the distance the water traveled before it meets their lips.

“It’s the same question as asking what can be improved about orange juice,” Gayner said.

And domestic water may be winning out. Gayner’s sales figures, he said, tell him that his urban-centered, flask-packaged brand is growing at the expense of imports, but he understands that the forces on his brand aren’t the same as those on Fiji, Dasani and Nestle.

“We’re growing leaps and bounds, and we will because we’re new and young and grabbing share,” Gayner said. “If I was a billion dollar brand I’d probably have a different story, but I’m not. I’m coming up through the category.”

And the story for those bigger, banner companies could be different in the near future. Bad economies don’t last forever, and when the American consumer is ready to loosen her wallet again, top bottled water brands – if they continue as they are – will steal most of the venom from their environmental antagonists. Maybe the U.S. Council of Mayors will even allow bottled water in City Hall again.Fred Beverages

Fred’s latest message of not sacrificing quality or taste by buying American has opened the doors of retailers for new Fred hangout locations. Notable new hangouts include: Duane Reade, 7-Eleven and Sunoco, and Fred is testing in Whole Foods’ HQ store. Special shout out to Sheetz on the retailer side and Exclusive on NYC distribution. And thanks to the many more independents who added Fred in ’08 and ’09.

Jana North America, Inc.

Jana announced the addition of 2 glass SKUS to its US portfolio: 330 ml bottles, 24 per case and 500 ml bottles, 12 per case. In the last year, Jana has also added more than a dozen distributors, including: Manhattan Beer (NYC Metro Area), Miller of Denton(Texas), and Tri State Juice (Ohio).

AMI Brands, Inc.

Volvic is entering its second year of partnership with UNICEF to help provide safe drinking water to the western Ethiopian region of Benishangul-Gumuz. Over 62 million liters of clean drinking water were provided to the region in 2008 and more wells are currently under construction.

Mountain Valley Spring Company

Mountain Valley Spring Water now utilizes 25 percent recycled PET in all of its plastic bottled water containers. Mountain Valley has recently redesigned its labels and packaging to communicate the serious commitment the company has made to act in an environmentally sustainable way.

Fiji Water

FIJI Water and Corona Beer are joining together this summer to offer a co-branded promotion at retailers nationwide. Starting in May, special deals will be available to shoppers on FIJI Water, Corona Extra, Corona Light, and other leading brands.

Global Water Solutions

After a six-month hiatus, Global Water Solutions’ AQUAVYBE, is flowing again. In addition, AQUAVYBE is now bottled in a patented, oxo-biodegradable PET plastic bottle.

Penguin Bottling Company

Penguin Ice has expanded its East Coast distribution network to include Montreal, Quebec City, and New York. Penguin Ice was selected to be the only water representing the green alternative at The Green Inaugural Ball.

Icelandic Spring

From its logo to its Web site, Iceland Spring is executing a comprehensive rebranding, including a new tagline, “Live Longer.” The rebranding also focuses Iceland Spring’s naturally high pH level (8.88).

Icelandic Water Holding

Icelandic Glacial added a 330 ml bottle. The new 330 ml bottle mirrors the same ice-sculpted design of other Icelandic Glacial products in a scaled-down size. Every 330 ml bottle showcases Icelandic Glacial’s new reversed logo as well as the official CarbonNeutral logo.

AriZona Beverage Co.

AriZona Beverage Co. ventured into a new area of hydration with Vapor Water. AriZona’s Vapor Water will begin distribution nationally this winter. For more information on this and other AriZona beverages please visit www.drinkarizona.com.

owater

sport owater recently gained authorizations from Stop & Shop and Giant and Whole Foods in the Southern Pacific. The company has recently updated sport owater packaging as part of a new brand initiative that uses the stories of inspirational athletes from around the country.

Nestle Waters North America

Nestle Waters North America signed a two year endorsement agreement with fitness guru Bob Greene, creator of “The Best Life Diet” program, author of diet and fitness books, and Oprah Winfrey’s personal trainer. Greene will promote Pure Life and educate consumers on the benefits of drinking water as part of a healthy lifestyle.Earth Water International

Earth Water is now working with soccer star Luis Figo, captain of the Portuguese National Soccer team. Earth Water is also now available in all Whole Foods across the country as well as a growing number of independent coffee houses.

Isbre Holding Corporation

Isbre Water has recently achieved placement in Whole Foods (NJ), Giant Food Stores (PA), Quickway Stores (NY) and The Great Atlantic and Pacific Tea Company which operates 447 stores under six banners along the Eastern Seaboard. Isbre can now be found on shelves in more than 5,000 retail locations.

Equa Water Corporation

Equa Water has reduced its bottles’ neck finish down to the industry standard 28 mm from its previous measurement of 38 mm.

Maddie’s Beverage Company, Inc

Maddie’s Beverage Company, maker of Wateroos children’s water-filled drink boxes, continues to gain distribution adding Jewel-Osco, Copps, Rainbow, Pick ‘n Save and Buehler’s to its list of retailers. In addition, the line is now being carried in the new natural food and beverage set at 300+ Toys R Us stores.

Essential Aqua

Essential Aqua debuted in December with a mission to help children in need. For every bottle of Essential Aqua Premium Drinking Water sold, a portion of the sales proceeds is being contributed to Children’s Miracle Network.

Mount Olympus Waters, Inc.

Mount Olympus Waters of Salt Lake City is now expanding the distribution of its new 20 oz. Limited Reserve “MTO” pure spring water.

New York Spring Water, Inc.

New York Spring Water, Inc. recently expanded its distributor base into the Midwest and South, and added a new package: the low environmental impact cup, called Cup-a-Water. With substantially less plastic than conventional PET bottles, Cup-a-Water is available in three sizes (140 ml, 200 ml, and 300 ml).

Indefinite Possibilities LLC

Good Vibes for You has redesigned its label. The new labels are imprinted with GVFY’s logo for Conscious Planet, a GVFY’s new division of partnerships geared towards sustainable initiatives and educational development. To learn more, go to www.goodvibesforyou.com.

The Tesalia Springs Co.

Guitig Mineral Spring Water has added a more expressive label that emphasizes the Cotopaxi Vulcano, where the brand’s water begins long before it arrives in a bottle.

Danone Naya Waters

In 2008, Naya began using 25 percent recycled plastic in its bottles. Naya announced that, starting in April 2009, its bottles will contain 50 percent recycled plastic. Naya is also donating 1 percent of revenues to the protection of the environment.

Refreshing Ideas, LLC

New to the market, h2O is distributed by Tree of Life and comes in a mainly-paper package. Just toss these aseptic cartons in your recycle bin so they can be made into cereal boxes and paper towels. The brand also appeared at the Green Odyssey party at the Sundance Film Festival.

National Beverage

LaCroix is debuting an eight-can fridge-pack to compliment its 12-pack of sparkling water. For more information, contact vwalker@nationalbeverage.com.

H2Om Water

As of March 1st 2009, H2Om’s line of seven waters with intention are available nationwide through Tree of Life and UNFI. H2Om most recently hosted the Hollywood Premiere of the documentary film WATER which is available on DVD on their website at www.H2Omwater.com.

Lifestyle Beverages

Style Water has expanded its availability to spots throughout the Northeast including the Hamptons, New York City, and Jersey beach areas. The brand is focusing on the fashion modeling industry, including placement in the Garment Center and certain publishing and modeling offices and parties.

Fitness Water, Inc.

H2Ultra bottled water will keep the USA National Weightlifting Team hydrated through training that will lead up to the next Olympics. Fitness Water has also inked an agreement for H2Ultra to sponsor a professional BMX Bike Team and promote H2Ultra at regional and national competitions throughout 2009.

Island Chill Bottled Water Company

Island Chill Artesian Water Limited has signed with Quest Sales and Marketing to represent Island Chill as its sales team for the U.S.A. Island Chill also recently signed Stern Beverage as its master distributor for the U.S.

OGO USA

OGO plans to introduce 1/2 L PET and 750 ml glass bottles this spring, and is in deep negotiations with elite hotels in Los Angeles. The brand is also getting ready to launch the New York market.

Hawaiian Springs

Hawaiian Springs debuted a new bottle design for 2009, when it will also seek national distribution for the first time. Hawaiian Springs recently contributed to the true Aloha spirit in the nation’s capital when it was served at the Hawaii State Society Inaugural Ball.

Spero Group, Inc.

Tumai Water is expanding its line to include new multi-pack options and is picking up new distribution in the Northeast and mid-Atlantic. In February 2009, Tumai Water was included in the book launch of Summer Rayne Oaks new book Style, Naturally at Stella McCartney’s boutique in New York city.

The Coca-Cola Co.

DASANI Purified Water is the premier Sponsor of Expedition: Blue Planet, an effort by Alexandra Cousteau to engage people in discussions about water and how to take meaningful action. For more information, go to www.alexandracousteau.com.

PurBlu Beverages, Inc.

To date, GIVE, a charitable bottled water that donates 10 cents of every bottle sold to a cause of the consumer’s choice, has raised over $50,000 for local charities where the product is sold. Currently distributed in the Northeast, Midwest, and parts of Canada, GIVE is expanding throughout the US in 2009. Find out more at drinkgive.com.

Project7

Project 7 Purified Water is available online at www.Project7.com, and is also soon to be distributed at Jewel-Osco grocery stores in the Chicago area. The bottled water is not only sourced domestically, but its packaging uses boxes made from 100 recyclable materials.

Soma Beverage Company

Soma Beverage Company has introduced Metroelectro in a 1L. Metroelectro is available in stores nationwide, including Whole Foods Market and Safeway Naturals.

Evian North America

Between 2000 and 2011 Evian will have shrunk its carbon footprint by half. The company simultaneously intends to develop voluntary initiatives making it possible to absorb the remainder of its carbon footprint. From 2009, Evian will support specific programs to store carbon by restoring wetlands with Ramsar and the IUCN. This twin effort will enable Evian to become carbon neutral from 2011 onward.

Talking Rain Beverage Co., Inc.

Talking Rain beverage company, which sells bottled water brands Air Water and Talking Rain Spring Water, was the water sponsor for The 26.2 With Donna: the national marathon to fight breast cancer.

Aquadeco LLC

Aquadeco Water has been pushing its brand into hotels, restaurants and night clubs. The brand offers promotional programs to hotels such as “free fills” and price matching for current water.

Twinlab Corporation

Twinlab Corporation offers TwinCal Natural Calcium Water as a new way to get more calcium into consumers’ diets. Drawn from a glacially-formed aquifer, TwinCal has 60 mg of calcium in each bottle and is available in 24 packs of 0.5 L bottles.

Bella Voda Inc.

As of March 1, DPI MidWest is distributing Bella Voda Premium Artesian water to all of its customers throughout the Midwest.

RushNet, Inc.

e-water has just received its trademark approval for Japan. In the U.S., e-water is distributed by Tree of Life.

AquaGenus

AquaHydrate recently signed an endorsement deal with Olympic athlete Julie Swail, and is now distributed by United Natural Food. The brand has been approved in select Whole Foods in California; the Southwest Division, as well as select Publix Super Markets in Florida and Georgia.

Pacific Water International Ltd.

redleaf is Canada’s new Ultra Premium bottled water. The brand’s unique process infuses the water with oxygen and retains naturally occurring minerals. Watch for distribution of redleaf in the U.S.A. coming soon.

Deep SeaWater International, Inc.

Kona Deep has recently been introduced to the continental 48 states. Sourced from deep in the Pacific Ocean, Kona Deep does not deplete the world’s fresh water supply.